Corporations are rapidly becoming aware of the need to make their businesses more environmentally friendly. It has been said that companies at the forefront of so-called “green initiatives” will see the same significant boost in terms of overall business success that companies at the forefront of the quality improvement revolution experienced in the 1980's.
The ecological footprint is a measure of human demand on the earth's ecosystems. The ecological footprint compares human demand with the Earth's ecological capacity to regenerate. Thus, it represents the amount of biologically productive land and sea area needed to regenerate the resources a human population consumes and to absorb and render harmless the corresponding waste, given prevailing technology and resource management practices.
A carbon footprint is a subset of the overall ecological footprint. The carbon footprint is a measure of the impact that human activities have on the environment in terms of the amount of greenhouse gases produced. These gases are produced by the burning of fossil fuels for our everyday living, for example, heating and electricity. The purpose of the carbon footprint is for individuals, corporations and the like to conceptualize their personal (or organizational) carbon dioxide contribution. A conceptual tool in response to carbon footprints are carbon offsets or the mitigation of carbon emissions through the development of alternative projects such as solar or wind energy or reforestation.
A carbon offset is an emission reduction credit from another organization's project that results in less carbon dioxide or other greenhouse gases in the atmosphere than would otherwise occur. Carbon offsets are typically bought and sold through a number of international brokers, online retailers, and trading platforms. For example, wind energy companies often sell carbon offsets. The wind energy company benefits because the carbon offsets it sells make such projects more economically viable. The buyers of the offsets benefit because they can claim that their purchase resulted in new non-polluting energy, which they can use to mitigate their own greenhouse gas emissions. The buyers may also save money, as it may be less expensive for them to purchase offsets than to eliminate their own emissions. The market for carbon offsets has grown dramatically recently, from approximately $97 million in 2006 to approximately $330 million in 2007, driven in large part by the green boom among United States corporations.
Commercial credit cards have an established history of offering rebates to corporate card holders based on the amount of purchases made with the card. While in most instances the rebate is in the form of a cash reward, certain rebate programs also afford the card holder the alternative of receiving tangible goods or services in lieu of the cash reward. Recently, financial institutions that offer card rebate programs have begun offering rebate options tied to voluntary carbon offsets, whereby the corporations may choose to forego a cash reward for carbon offset rewards. However, while offering carbon offsets as a commercial credit card reward is beneficial in terms of the benefits afforded by such offsets (as discussed above), it does not provide the corporation with a comprehensive program that mirrors the corporation's overall initiatives for improving environmental concerns. While carbon offsets serve to “offset” a corporation's negative impacts on the environment, they do not seek to remedy or provide alternatives to these negative impacts.
Therefore, a need exists to develop a comprehensive environmental initiative program associated with commercial purchases. The desired program should be robust such that it encompasses not only purchases made through a program-implementing entity, such as a card-issuing financial institution, but also any other purchases made by the corporation/commercial entity. The comprehensive nature of the program should not only entail a negative environmental impacting assessment, such as carbon foot-printing and means to offset negative environmental impacting procurements, such as carbon offsets, but should also provide for a positive impact on environmental attributes associated with future purchases. Additionally, the desired program should create environmental awareness amongst not only the corporation and its employees, but also third parties associated with the corporation, such as other entities in the supply chain and family members of employees.